While all Performance Standards are applicable to this investment, IFCs environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
All the DCs are located in urban areas in leased spaces and the new DCs are also expected to follow the same. Therefore, kind of impacts envisaged under Performance Standard (PS) 5 (Land Acquisition and Involuntary Resettlement) is not applicable. No direct primary production of living natural resources is involved in the project and there is no material risk of significant conversion of natural and/or critical habitats in the supply chain and thus PS6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources) is not applicable. Also, the type of risks and impacts envisaged in PS7 (Indigenous Peoples) and PS8 (Cultural Heritage) are not applicable.

This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key E&S risks and issues related to this project include: The company’s capacity and systems to manage its social, environmental, health and safety aspects of its operations (sourcing, DCs and transportation) in compliance with legal requirements as well as IFC Performance Standards and World Bank Group (WBG) EHS guidelines; life and fire safety (L&FS) management and emergency response; resource efficiency (mainly energy); assurance of fair, safe and healthy working conditions for its workforce (both employees and third party workers); pollution prevention especially management of solid wastes and wastewater; and ensuring compliance with IFC Performance Standards (PSs) requirements in the supply chain.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.

Identification of E&S risks and impacts: Considering the size of the DCs and that they are typically set-up in leased premises in urban commercial areas, no formal environmental and social impact assessment (ESIA) is required for setting up new DCs. Before leasing a new location, the company ensures that the new premise has the required regulatory permits and approvals. Additional permits as required e.g. registration under the shops and establishment act/rules, fire No Objection Certificate (NOC) are obtained by the company.



The company will implement a corporate checklist on screening of new locations to identify any risks with respect to IFC PSs and legal requirements and preparing a management plan for the same.

Policy and Management Systems: The company ensures compliance with applicable legal requirements in its operations, however, currently there is no documented E&S policy or management system. As per the ESAP, the company will establish an overarching corporate Environmental, Health and Safety (EHS) Policy defining the E&S objectives and principles for all operations that will guide the company to achieve E&S performance in compliance with the applicable legal requirements and IFC PSs.



Also, as per the ESAP, the company will implement key procedures/programs on the following: (a) Screening of new locations for DCs to identify any risks with respect to IFC PS and legal requirements and preparing a management plan for the same; (b) Life & fire safety (L&FS) and emergency response management program for new and existing DCs; (c) occupational, health and safety management; (d) waste management; (e) transport safety management; (f) monitoring and reporting framework including ongoing internal/external reviews, monitoring and documentation of performance on key indicators and reporting to the management/board/investors; (g) roles and responsibilities and training needs for responsible personnel; and (h) community grievance mechanism.



Organization: The company has a Projects team which is responsible for identifying new locations for DCs, working with the owners to ensure provisions of necessary infrastructure, regular operation and maintenance of various facilities at the DCs and identifying new infrastructure needs to meet regular capacity increase needs. SGSPL’s Merchandising team identifies and contracts various suppliers and is responsible for ensuring compliance in supply chain with quality requirements of the company.



Going forward, to strengthen the E&S Organization, as set forth in the ESAP, company will identify an appropriately qualified professional for implementation and monitoring of various E&S management procedures and systems discussed in this document. The said E&S staff will coordinate with various departments to ensure compliance with IFC PSs and WBG EHS guideline requirements.



Emergency Preparedness and Response: The visited DCs were noted to be provided with fire extinguishers, which are adequately
maintained. Currently no fire hydrant/hose reel, detection and alarm systems and emergency lighting have been provided at the DCs. As per the ESAP, the company will review the applicable requirements under the National Building Code (NBC) and prepare a plan for upgradation of life and fire safety systems for existing DCs within a reasonable timeline agreed with IFC. For the new DCs, the company will include the required requirements of NBC in its screening checklist (discussed above) and ensure that adequate life and fire safety systems provided in all DCs meet these applicable requirements.



Based on the observations during the site visits and discussions, documented emergency response plans have not been developed at the DCs. Also, though training/mock drills are reported to be conducted (for security personnel), no documentation of these was available for review. As per the ESAP, the company will develop emergency response plans for each of its facilities and ensure regular training and mock drills. Sample of such emergency response plans and training records for few of the DCs will be shared with IFC for review.



Monitoring & Reporting: The DCs monitor consumption of electricity, diesel and water on a daily basis. Regarding occupational, health and safety (OHS), details of accidents are documented by HR and shared with the DC management and National HR team. As per the ESAP, the company will develop and implement a monitoring and reporting framework which will include processes on monitoring of certain key indicators (e.g. energy efficiency, OHS incidents/accidents and their investigation, EHS training, mock drills), internal E&S assessments/reviews, and management review at DC level and company level.

The company employs 150 employees in its corporate office and 1350 employees in operations in various cities. In addition, about 1400 third party workers are hired through various contractors. Approximately 80% of this workforce is involved in the DC operations. The workforce is expected to grow to over 5000 by 2017.



HR Policy and Management: The company has a HR policy manual which has policies on various operational matters e.g. confirmation, local conveyance, joining bonus, performance improvement, relocation, full and final settlement. Also, the policy manual describes the company’s culture and code of conduct for all employees. As part of the ESAP, the company will document and ensure implementation of specific policies on non-discrimination, freedom of association, retrenchment, prevention of forced labor and child labor in line with PS2 requirements. Each of the regions have HR managers (reporting to the regional heads and National Head - HR) who are responsible for implementation of HR policies and processes within various facilities in their region. The policies are available on the company’s internal shared drives and accessible to employees.



Working Conditions and Terms of Employment: SGSPL has standardized employment conditions included in the written contracts of employment for each employee. The contracts describe the working conditions, terms of employment and benefits provided including probation period, working hours, wage structure, leaves, medical insurance, provident fund, etc. Based on available data, the base salary for the company employees is above the national minimum wage. In addition, all employees are paid house rent allowance, transport allowance and annual bonus. Also, all employees are covered under a medical insurance policy. The attendance is recorded through a biometric system. SGSPL has contracted an external agency to prepare its payroll and support the HR team in ensuring compliance with various legal requirements related to payment of wages. Salaries are paid to employees through bank accounts.



Grievance mechanism: SGSPL has implemented a mechanism for receiving and processing complaints related to code of conduct issues called “Dhwani.” Under the mechanism, the complaints can be sent through a dedicated email id or through Dhwani boxes placed in the company’s facilities.

The company also has a documented policy on prevention of sexual harassment. Internal complaint committees (ICCs) have been formed both at the corporate level as well as regional level. The policy and complaint handling mechanism is communicated through displays.

As set forth in the ESAP, the company will develop a grievance mechanism specifically for handling HR related grievances in line with the PS2 requirements. Also, the company will ensure communication and accessibility of the mechanism to all employees and third party workers.

Freedom of Association: The workers at the DCs are currently not part of any union. As discuss
ed above, the company will document and implement a policy on Freedom of Association in line with PS2 requirements.

Prevention of Child Labor and Forced Labor: The HR teams at the DCs collect age proofs for the employees which are maintained on file to prevent use of child labor. Salaries are paid on 7th of every month. No significant loans were noted to be provided to the employees. As discussed above, the company will document and implement a policy on prevention of child and forced labor in line with PS2 requirements.

Occupational Health and Safety (OHS): As the main operations are receiving, loading/unloading and some processing of fruits and vegetables, the OHS risks (except fire safety, already covered above) are limited. The company provides first-aid boxes in the DCs and the security team is typically trained in first-aid. Any accidents within the facility are recorded. Based on the available records, 3 incidents (involving minor injuries) have taken place at the visited DC in Bengaluru in 2015.



To strengthen OHS management for its operations, as discussed under PS1 above, as per the ESAP, the company will develop an OHS management program which will at least cover provision and use of personal protective equipment (PPE) for workers, use of risky equipment (e.g. cutting machines, lifting machines), injury prevention (due to slips, trips and falls and lifting/handling of materials), first-aid, regular OHS training, and accident/incident/injury reporting.



Third party workers: The company employs third party workers for goods movement (loading, unloading, stacking, picking), security and housekeeping. Attendance for all third party workers is also tracked through biometric attendance system. The data is then provided to the contractors who then pay their workers accordingly. A HR representative of the company is generally present at the time of distribution of wages to third party workers. Based on review of available records, the base salary levels for contract workers are above the applicable minimum wages.



To ensure that various facilities comply with legal requirements related to third party/contract workers, the company has recently engaged an external company to conduct regular assessments to monitor compliance on working conditions and terms of employment. The report will be presented to HR who will follow-up with the contractors on the identified non-compliances.



Supply Chain: The supply chain of the company can be divided into five categories – (a) Fruits and Vegetables; (b) Staples; (c) Fast Moving Consumer Goods (FMCG); (d) Gourmet and Breads and (e) General Merchandise. The biggest contributor in sales is FMCG category under which the goods are sourced from reputed Indian and global FMCG companies. Similarly the general merchandise is sourced from various suppliers. The staples category includes rice, pulses, sugar, spices, dry fruits, etc. part of which (about 30% of the category volumes) are sold under
the company’s own private labels. For this, the company sources the packed staples from re-processing centers (RPCs) (currently 6 nos. located in various cities). A representative of the company is stationed at each of the RPCs for quality control (QC). Going forward, the company also plans to buy staples directly from the mills packed under company’s labels. The company also sources and sells ground coffee beans (with customized requirements), which are sourced from a plantation.



Fruits and Vegetables (F&V) are sourced at two levels – (i) on a regional level through a network of collection centers; and (ii) on a national level, from traders and local agricultural produce markets (mandis). Currently the company has four collection centers and is planning to open more as well as move the national level sourcing also to its collection centers. The company does not have any contracting relationship with the farmers and they are free to sell their produce to anyone. However, at each collection center, the company has a team which monitors the crop production in the area and maintain rapport with the farmers in the area.



Gourmet and bakery products are sourced from local food processing and bakery companies in the regions. Fresh and frozen meat products are sourced from meat processing companies. The company is exploring options of having an external company set-up its bakery operations within the DC premises.



As per United States Department of Labor’s (DoL’s) list of goods produced by child or forced labor, a high risk of child labor and forced labor (relevant for a business like SGSPL’s) in India is present in Rice and Sugarcane production. In SGSPL’s case, the company sources the Rice and Sugar from mills and thus does not have any direct relationship with the Rice and Sugarcane producers.



Also, based on the type of contracting relationships and volumes, the company does not have any significant leverage on its FMCG, general merchandise suppliers, staple, gourmet and bakery suppliers as well as farmers supplying the F&V. As per the company, going forward no significant changes are expected in the supply chain structure except those mentioned above and therefore the company is not expected to have significant leverage and control over its suppliers in these categories.



However, the RPCs are exclusively packing the goods for the company and therefore, as per the ESAP, the company will add applicable requirements of IFC PSs for supply chain (i.e. no child labor, no forced labor, no significant safety risks/hazards and basic legal compliance) in the contracts signed with the RPCs and ensure their implementation through regular inspection of their operations. The company shall also document the inspection reports ensure corrective actions/consequences in case of non-compliances.



In the future, in case there are changes in the supply chain structure and contracting relationships, the company shall evaluate its supply chain and w
here there is a risk of adverse labor practices due to particular product involved or other relevant considerations, depending on level of management control, the company will introduce possible contractual, monitoring and compliance mechanisms to address the risk of inappropriate forms of labor in its direct supply chains.

Resource Efficiency: The company targets optimizing the use of electricity. The DCs use energy efficient LED lighting and are also provided with translucent roofing sheets to use natural light in the daytime. Additional activity being considered is on-site generation of solar power by installing solar panels on the roof of the DCs.



Emissions and Waste management: Electricity is mainly sourced from the public grid at the DCs. For back-up, diesel generator (DG) sets are provided.



The wastewater from the DCs is mainly domestic sewage generated from the toilets, handwash stations and washing of fruits and vegetables. The wastewater is discharged in the septic tank provided on-site, which is cleaned regularly or discharged in the sewage line (as in Delhi). The stormwater is discharged in the public stormwater drains. The Company shall look at providing basic treatment through oil and grease traps (to separate oil in the stormwater, if any from vehicle movement).



Solid waste generated from the DC operations include paper and packaging waste, organic waste (food waste from canteen and F&V waste), expired products and damaged products. Paper and packaging waste are sold to external agencies whereas the organic waste is sold to piggeries. The expired products are given back to the suppliers. The damaged products are disposed of through external agencies. As the company will have a significant number of DCs and the waste management infrastructure in various cities may be different, to ensure consistency across operations, as set forth in the ESAP, the company will develop and implement a solid and hazardous waste management program which would specify storage, handling and disposal practices for all waste streams in compliance with the applicable legal requirements.

Greenhouse gas (GHG) emissions: Based on available data on electricity and diesel consumption, the current GHG emissions footprint of the company has been estimated to be around 1054 tons CO2 equivalent per annum (tpa CO2 eq). As the company is expected to expand its operations, the additional GHG emissions are expected to be 3514 tpa CO2 eq.



Pesticide Management: The company will not use or promote use of any chemicals in its agri-supply chain which are banned either internationally (e.g. by World Health Organization) or under the national legislation. If the company undertakes to provide seeds and agrichemicals to its farming suppliers, the company will impart training on safe handling of agrochemicals as part of the package.

The company employs unarmed private security guards at its DCs. In terms of transport, a typical DC handles about 60 vehicles for receipt and delivery of goods across a given day. The company evaluates the available parking space and access to the facility as part of the screening of locations for prospective DCs. The same will added in the checklist on screening of new locations, as mentioned under PS1 above.



Also, as per the ESAP and as part of the E&S procedures, company will develop a transport safety program which will include guidelines for drivers on traffic safety to minimize risks to safety of communities from vehicles plying to and from the DCs.

The company works with RWA’s (Resident Welfare Associations) of residential localities in which the company operates, to sponsor and provide expertise for their social activities within their community. The company also works with the communities to sponsor various charitable causes such as food donation to the needy, assistance in times of natural calamities, etc.

SGSPL has developed a technology platform that is available to all social/ community organizations looking to raise funds for social causes. The company provides this service free of cost to these organizations and they can use this to setup their campaign, collect donations/ food and get it delivered to their target destinations.

As set forth in the ESAP, the company will develop and implement a community grievance mechanism in line with the IFC PSs.

Considering the corporate nature of the investment, SGSPL will disclose this ESRS and the ESAP at the following address:

1st Floor, Madan Arcade
No. 129, 1st Main Road, Domlur 2nd Stage
Bangalore – 560071, Karnataka.
Phone: 080-43435000
Email: mailto:vipul@bigbasket.com

Any queries and/or comments about the project may be directed to:

Vipul Parekh
No. 129, 1st Main Road, Domlur 2nd Stage
Bangalore – 560071, Karnataka.
Phone: 080-43435000
Email: mailto:vipul@bigbasket.com

Broad Community Support is not applicable for this project

BigBasket - D(37605) Supervision Disclosure Snapshot – Version 2
Description	Anticipated Completion Date	Status	Comments	Completion Date
Identify an appropriately qualified professional at the company to implement and monitor Environmental and Social Management procedures discussed under S. No. 2.	28-Feb-2016	Completed	Completed	12/13/2017
(a) Develop key E&S procedures/programs in line with IFC performance standards (PSs) requirements as described in the ESRS, including on: (i) Screening of new locations for distribution centers (DCs) to identify any risks with respect to IFC PS and legal requirements and preparing a management plan for the same. The screening (among other things) shall include screening for adequacy of life and fire safety systems, parking space and access road. (ii) Life & Fire Safety (L&FS) and emergency response management program to ensure provision and ongoing operation and maintenance of fire safety systems as per applicable requirements, documentation of emergency response plans, regular training and mock drills; (iii) OHS management program as described under PS2; (iv) Solid and hazardous waste management program specifying storage, handling and disposal practices for all waste streams in compliance with the applicable legal requirements; (v) Transport safety management which includes guidelines for drivers on traffic safety to minimize risks to safety of communities from vehicles plying to and from the DCs; (vi) Monitoring and reporting (internal and external) Framework including processes on monitoring of certain key indicators (e.g. energy efficiency, OHS incidents/accidents and their investigation, EHS training, mock drills), internal E&S assessments/reviews, and management review at DC level and company level; (vii) Community grievance mechanism; and (viii) Roles and responsibilities and training needs for responsible personnel; (b) Implement the documented procedures at all its DCs.	30-Jun-2016	Completed	Completed	12/13/2017
(a) Document specific policies on non-discrimination, freedom of association, retrenchment, prevention of forced labor and child labor in line with PS2 requirements. (b) Develop a grievance mechanism specifically for handling HR related grievances in line with the PS2 requirements. (c) Ensure implementation and communication of the new policies and grievance mechanism to all employees and third party workers.	31-Mar-2016	Completed	Completed	12/13/2017
Add applicable requirements of IFC PSs for supply chain (i.e. no child labor, no forced labor, no significant safety risks/hazards and basic legal compliance) in the contracts signed with the Re-processing Centers (RPCs). A mechanism to ensure their implementation and corrective actions/consequences in case of non-compliances shall be agreed upon.	31-Mar-2016	Completed	Completed	12/13/2017
Review the applicable requirements under the National Building Code (NBC) and prepare a plan for upgradation of life and fire safety systems for existing DCs. Ensure implementation of the upgradation plan mentioned above [as per agreed timelines in the plan] Include the identified requirements of NBC in its screening checklist (discussed above under S. No. 2).	30-Nov-2015	Completed	Completed	12/13/2017